The recent news that Nike would be selling its sneakers directly through Amazon sent shockwaves through the retail sports industry. Nike resellers such as J.C. Penney and Foot Locker saw massive single-day declines at about 6 percent and 5 percent respectively, as the stock market reacted to how badly the deal might affect these traditional retailers. Similar tremors are felt in many sectors today as unicorns like Casper, Airbnb, and Uber lure consumers away.
The convenience of doing business with these digital companies has led to claims that “convenience is the new loyalty.” Convenience does matter a lot to consumers, but by now, most retailers offer the typical elements of convenience—wide online selection, low prices, fast delivery and mobile apps.
In other words, pure convenience as defined above is no longer “the new loyalty” if everyone is offering it—it is simply the first step. Other capabilities, such as obsessively refining customer experience using data, and working to marry convenience with a human element, are the true differentiators for many successful brands.
Embrace “Convenience,” But Don’t Expect An Award For Doing So
Many consumers simply expect shopping to be convenient, anything less is a disappointment. Loyalty thought leaders like Howard Schneider preach the value of reducing friction to increase loyalty, such as by saving account information and syncing website and mobile data.
For marketers who face the challenge of having to catch up to Amazon and other digital retailers with a more nimble consumer experience department, it’s not just about “me too.” It’s best to focus on growth areas and leapfrog ahead to deliver the best experience to the most important clients. Introducing a key fob for easier payments at a register is an example of an innovation that may be used by baby boomers, but will decline as consumers embrace mobile payments. Better to follow the future and embrace mobile payments.
Know Your Customer Better
The problem is that reducing friction without considering the consumer’s point of view is not enough. The new convenience starts with knowing customers, by obsessively collecting, analyzing and using data. While baby boomers may value Amazon most for its convenience, millennials prefer the elements of Amazon Prime for its personalized loyalty messaging. Amazon’s data focus allows for sophisticated product recommendations, time messaging based on consumer behavior and much more that makes consumer’s lives easier.
Sephora uses internal and third-party data to drive a loyalty program called Beauty Rewards, which suggests products based on past purchases and preferences to save consumers from having to wade through pages of different makeup offerings.
Airbnb thinks of the data they collect as “the voice of the customer.” They use data in many elements of product development—their data scientists are involved in design and marketing decisions, not just in building algorithms. It was through data that they have learned to suggest listings to consumers where other similar consumers have booked within a city, for example the Mission vs. Pacific Heights in San Francisco. When consumers arrive at their destination, they will be conveniently located within an area that suits them well.
Differentiate Your Brand Using a Human Element
Consumers want to be known, liked and understood. Despite their global footprint, Starbucks asks every customer for their name, writes it on their cup and calls it out when their order is ready. This creates a personal moment between the customer and the enormous brand—one that is also convenient. It’s easier to respond to “Dave” than to “Double caramel soy grande latte.” This example has nothing to do with technology or data.
Melanie Whelan, the COO of cult workout brand SoulCycle, talks to unhappy consumers where they want to be talked to. She explains that they diligently respond to every negative social media post to ensure their customers feel heard and respected, which also opens up a convenient communication channel on the spurned consumer’s platform of choice.
Chatbots are an example of an innovation in convenience that is gaining a lot of traction, but in some cases may be counterproductive to true convenience. In a recent survey, 97% of respondents said that it was important that the customer service representative showed a genuine interest in solving their problem.If not, the problem might not be solved on the first try, putting the burden back on the customer.
Consumers value convenience, but they are still human. The new convenience ensures that brands embrace this fact.
Selligent provides omnichannel marketing technology.